Which statement about power surges under BOP is true?

• A. Power surges are always covered under BOP.
• B. Power surges are not covered, but losses from a fire caused by a surge are covered.
• C. Computers damaged by a power surge are never covered.
• D. A power surge within the insured premises is automatically covered.

Answer: (B)

Power surges aren’t covered as a stand-alone peril under a BOP. The policy covers direct physical loss caused by insured perils, and a surge itself isn’t one of the covered perils. If a surge causes a fire, however, the resulting fire damage is covered because fire is a listed peril. That makes the statement true: surges aren’t covered on their own, but losses from a fire caused by a surge are covered.

The other ideas don’t fit because the surge isn’t automatically covered, and the mere fact that equipment sits inside the insured premises doesn’t grant automatic coverage for surge damage. Computers damaged by a surge aren’t categorically never covered—they could be payable if the damage stems from a covered peril (like a fire) or under a specific endorsement for electrical/equipment breakdown.